Oct. 26 (Bloomberg) -- The European Commission is resisting
attempts by some national governments to set limits on the
European Central Bank’s planned power to supervise all banks in
the euro area.

The Brussels-based commission renewed its call for the ECB
to have the right to take over tasks from national regulators
without having to justify itself, including supervision of banks
that haven’t received public aid and aren’t seen as systemically
important, according to a document dated Oct. 25 and obtained by
Bloomberg News.

The commission is fighting a move to set hurdles for the
ECB to assume oversight of smaller banks and those that haven’t
received bailouts. An earlier draft of the plan prepared by
European Union member states had called for the ECB to present a
“reasoned decision” before stepping in to supervise such
lenders.

“National competent authorities should be responsible for
assisting the ECB on its request,” according to the document.
The ECB should be in charge of thrashing out how this
cooperation will work, the commission said.

Cyprus, which holds the rotating presidency of the EU,
proposed this week that the ECB should only be allowed to take
over oversight for such lenders if financial stability is under
threat. The ECB would also be required to consult with national
regulators and explain its reasoning before stepping in.

Common Supervisor

EU leaders in June embarked on plans to build a common
supervisor as a step toward offering direct bank bailouts from
the euro area’s firewall fund. German Chancellor Angela Merkel
has said it’s an open question whether European policy makers
can meet a self-imposed deadline to transfer oversight powers to
the ECB by Jan. 1.

“Talks at technical level are making progress in
clarifying issues and working towards solutions, said Stefaan De
Rynck, a spokesman for Michel Barnier, the EU’s financial
services chief. “Work is on track for a political agreement by
end of the year.”